10-Q: Ameritek Ventures Reports Mixed Q2 Results: Revenue Declines, Net Income Improves Amid Cost Management Efforts

Ameritek Ventures' Q2 2024 shows a revenue decrease but an improved net income due to cost management.

Summary

• Ameritek Ventures, Inc. filed its Form 10-Q for the quarter ended June 30, 2024.
• The company reported a decrease in revenue for both the three and six-month periods compared to the previous year.
• However, net income improved for the six-month period due to cost management efforts.
• Revenue for the three months ended June 30, 2024, was $186,920, a 32% decrease from $274,279 in 2023.
• Revenue for the six months ended June 30, 2024, was $402,842, a 22% decrease from $516,599 in 2023.
• Net income for the six months ended June 30, 2024, was $16,085, compared to a net loss of $43,840 in 2023.
• The company has significant related party transactions, including loans and management agreements with Epazz, Inc.
• Ameritek is involved in legal proceedings, including a lawsuit filed by Meridian Pacific Holdings, LLC and a lawsuit against Clinton L. Stokes, III.
• As of August 14, 2024, the Company had 554,226,791 outstanding shares of its common stock, par value $0.001.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While net income improved, revenue declined, and there are ongoing legal issues and internal control weaknesses. The company's plan to raise equity capital suggests a need for additional funding.

Positives

• Net income improved for the six-month period, reaching $16,085, compared to a net loss of $43,840 in the same period last year.
• Operating expenses decreased by 39% for the first two quarters of 2024, indicating improved cost management.
• The company is now using a proprietary server from Epazz, Inc., reducing reliance on third-party vendors.
• The judge in the Meridian Pacific Holdings, LLC case dismissed all claims against Ameritek Ventures, Inc. on October 19, 2023.

Negatives

• Revenue decreased by 32% for the three months ended June 30, 2024, compared to the same period in 2023.
• Revenue decreased by 22% for the six months ended June 30, 2024, compared to the same period in 2023.
• The company has material weaknesses in its internal control over financial reporting, including a lack of a functioning audit committee and inadequate segregation of duties.
• Interest expenses were up by 19% to $89,132 for the six months June 30, 2024, compared to $75,010 during 2023.

Risks

• The company's reliance on borrowings to finance its working capital needs poses a financial risk.
• The ongoing legal proceedings, including the lawsuit against Clinton L. Stokes, III, could have potential adverse outcomes.
• Material weaknesses in internal control over financial reporting could lead to misstatements in financial statements.
• The company's ability to raise equity capital to finance operations is subject to market conditions.

Future Outlook

The company plans to raise equity capital to finance operating and capital requirements, further develop products, finance marketing and promotion, secure additional property and equipment, and for other working capital purposes.

Industry Context

The company operates in the software, hardware, and technology sectors, providing solutions for warehouse management, medical devices, blockchain technology, augmented reality, and vertical landing aircraft services. The company's performance is influenced by trends in these sectors, including the demand for warehouse solutions, advancements in medical technology, and the adoption of blockchain and augmented reality technologies.

Comparison to Industry Standards

• It is difficult to compare Ameritek Ventures directly to industry standards due to its diverse portfolio of businesses.
• Companies like Manhattan Associates and Blue Yonder are key players in the warehouse management software space, and their financial performance could be used as a benchmark for Interactive Systems, Inc. and interlinkONE, Inc.
• In the medical device sector, companies like Medtronic and Johnson & Johnson set the standard, and their R&D spending and product innovation could be compared to Ameritek's DittoMask and FlexFridge initiatives.
• For blockchain technology, companies like IBM and Accenture are major players, and their investments in blockchain solutions could be compared to WebBeeO and CordTell companies.
• In the augmented reality space, companies like Microsoft and Magic Leap are key players, and their advancements in AR technology could be compared to Augmum, Inc.
• For vertical landing aircraft services, companies like Joby Aviation and Archer Aviation are key players, and their progress in developing electric vertical takeoff and landing (eVTOL) aircraft could be compared to AeroPass, Inc.

Legal Proceedings

• Meridian Pacific Holdings, LLC filed a lawsuit against certain directors, officers, affiliates, and the Company for breach of contract and fraud; the claims against Ameritek Ventures, Inc. were dismissed on October 19, 2023.
• The Company filed a lawsuit in the Clark County, Nevada, court against Clinton L. Stokes, III, the former owner of the Company, to settle the matter of shares ownership and that of if the asset coming from Fiber Optic Assets was purchased free and clear of any encumberment from Meridian Financial Group, LLC; this case is still pending.

Related Party Transactions

• The company has significant related party transactions, including loans and management agreements with Epazz, Inc.
• Ameritek merged with Bozki, Inc. on November 13, 2020. At the merger the Company assumed a 10-year, convertible note of $200,000 and accrued interest of $46,648 with Epazz, Inc., (Epazz), a Wyoming corporation and a related party.
• Ameritek merged with Bozki, Inc. on November 13, 2020. At the merger the Company assumed a 10-year convertible note of $1,000,000 and accrued interest of $9,078 with Epazz, Inc., a related party.
• The Company merged with VW Win Century, Inc. (previously registered as FlexFridge, Inc., an Illinois Corporation) on November 10, 2020. At the merger the assuming simple note of $250,000 and accrued interest of $183,566, with Epazz, Inc., a related party.
• Ameritek entered into a management agreement with Epazz, Inc., a related party, with a minimum annual fee of $350,000 on November 12, 2020 in consideration for the services provided and to be provided.
• On October 2, 2023 Ameritek issued 7,700,000 shares of Preferred Stock, Series C to Star Financial Corporation, a related party, for debt issuance fees consistent with the terms of the agreement.
• The President of Star Financial Corporation is Fay Passley, Shaun Passleys mother.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue and the material weaknesses in internal control.
• Employees may be affected by the company's cost management efforts.
• Customers may be impacted by the company's ability to develop and deliver its products and services.
• Creditors may be concerned about the company's reliance on borrowings to finance its working capital needs.

Next Steps

• The company plans to continue developing its products and services.
• The company intends to raise equity capital to finance its operations.
• The company will continue to manage its costs to improve profitability.
• The company will address the material weaknesses in its internal control over financial reporting.

Key Dates

Keywords

financial results, Ameritek Ventures, Form 10-Q, quarterly report, revenue, net income, related party transactions, legal proceedings, debt conversion, internal controls